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Little Green Feedstocks

It sounds like something from a greenskeeper’s nightmare – certain folks have plans to grow algae and dandelions on purpose

, and in large quantities.

Algenol's Paul Woods and his cyanobacteria. Credit: Algenol

Algenol’s Paul Woods and his cyanobacteria. Credit: Algenol

Firstly, in the golf course-choked state of Florida, Algenol CEO Paul Woods is scouting a location for a $500 million algae-to-fuels plant. The company was founded and has been operating in the southern part of the state for years now. Its claim to fame is cheap ethanol made from cyanobacteria in a custom-designed bioreactor. Woods does not, as far as I know, have plans to re-purpose stagnant water traps for the purpose of growing his feedstock.

But Florida, though it is sunny and warm, might have missed out on this slimy opportunity. In recent months, Woods questioned the state’s commitment to biofuels. For example, Governor Rick Scott repealed a state law requiring 10% ethanol in gasoline. But now, according to Fort Myers ABC 7 News, the company has been persuaded to build in its home state – apparently the estimated 1,000 jobs was just the ticket to getting a warmer welcome. Algenol needs to be sited near a major CO2 source (i.e., factory or power plant emissions) and says potential partners have come forward.

Meanwhile, it’s called the Russian Dandelion, though it grows in Germany. This common lawn scourge is bringing about not curses, but praise, for its rubber producing capability. Tire makers are enthused about its white latex sap. The goo is expected to give the subtropical rubber tree a bit of competition. Making rubber from dandelions is not a new idea, but has been given new life by a project at the Fraunhofer Institute for Molecular Biology and Applied Ecology.

Russian dandelions, growing in Germany. Credit: Fraunhofer Institute

Russian dandelions, growing in Germany. Credit: Fraunhofer Institute

Fraunhofer scientists, in a collaboration with folks from tire firm Continental are working on a production process for making tires from the dandelions. In addition to the manufacturing process, the researchers are also using DNA markers to grow new varieties of the plant with higher rubber yields.

The project sounds kind of cute but the researchers behind it are dead serious. The partners have already begun a pilot project and plans are afoot to move to industrial scale. According to them, the first prototype tires made from dandelion rubber will be tested on public roads over the next few years.

You can read an earlier post on the history of dandelion rubber here.

Gates Invests In KiOR, Elevance Coming to U.S.

Bill Gates (yes, that Bill Gates), through a fund called Gates Ventures, is investing $15 million in advanced biofuels firm KiOR. Gates is not a huge cleantech investor generally (though he has backed other firms such as the young MIT spin-off Liquid Metal Battery). So it’s rather interesting that he’s decided to invest in KiOR, which is not at all an “early stage” tech firm – in fact, it is a public company.

Vinod Khosla, a tech pioneer who is much more well known as a cleantech investor with deep pockets, has committed to putting in another $85 million to KiOR in debt and stock. Khosla was instrumental in the founding of the company and has been an unusually loyal and generous benefactor.

With this $100 million infusion, KiOR says it will be able to build out its capacity-doubling project at its Columbus, Miss. facility (see Khosla, Kior Double Down).

If we go back in time a bit to the end of the second quarter, we see that KiOR had started shipping its drop-in fuels (gasoline, diesel, heating oil) made from wood. But the amount of production was behind schedule, and its cash position was delicate, to say the least. At the time, analysts suggested that the firm should bring in a corporate partner such as a refining company. But that’s not what happened.

It is clearly good news for KiOR that it has a few friends who are willing to keep dipping in to their own pockets to make sure its first facility can reach the point where it generates enough cash to fund operations – and presumably prove out that KiOR’s next commercial facility (planned for Natchez, Miss.) will be profitable.

And its only fair to note that the same analysts who suggested KiOR get an additional large investor are also very bullish on the company. So what is there to like about KiOR?

  • KiOR has significantly increased uptime at the Columbus facility
  • It has produced and shipped actual product
  • Yields are rising
  • Drop-in biofuel is considered a much more desirable product than ethanol
  • KiOR’s technology can accommodate cheap feedstocks (the expansion will use waste railroad ties)

The main negative, in fact, was the near-term need for additional capital. And even back in August – before both recent investment announcements – analysts at Credit Suisse and Raymond James had an outperform rating on KiOR’s stock.

Does all of this mean that KiOR is a guaranteed win? No, of course not. But I find it interesting how far KiOR is poised to go with the help of a few true believers.

Elevance comes to the U.S.

Elevance is another cleantech firm that is expanding its commercial operations. The company makes specialty chemical intermediates – functionalized esters and the like – for use in downstream products for personal care, coatings, lubricants and additives. Its feedstock is vegetable oil, which it processes using olefin metathesis.

The company did not have an IPO, as KiOR did, but chose instead to raise private capital. Its first plant, in Gresik, Indonesia is a large one, at 180,000 metric tons per year. Elevance says that its output there is all spoken for, and it is now proceeding with plans to build a second plant, also in Natchez, Miss. That facility is expected to come online in 2016.

 

 

 

 

 

Beta Renewables Officially Opens Italian Biofuels Plant

It’s official – Beta Renewables first commercial-scale cellulosic ethanol plant is open in Crescentino, Italy. The roughly $200 million plant can take in up to 270,000 tons of biomass per year and produce 20 million gal of second-generation ethanol per year. Parent company Mossi & Ghisolfi put up the dough to build the facility without any government subsidies. It’s an unusual funding model, to say the least!

It's Italian, so of course it is stylish. Beta Renewables Crescentino biofuels plant.

It’s Italian, so of course it is stylish. Beta Renewables Crescentino biofuels plant.

This project leads the first crop of cellulosic biofuels facilities to reach start-up. Beta Renewables, along with its sister firm, engineering company Chemtex, have put together a facility that produces sugars from cellulosic biomass and then ferments those sugars into ethanol.

The feedstock includes wheat straw and an energy crop called Arundo donax

, or Giant Reed.

I just want to point out that this is the second blog post in a row discussing commercial-scale cellulosic biofuels facilities (see below for KiOR). Does this count as the official start of the cellulosic biofuels industry?

Just to have fun with a little bit of contrast, back in July, a ginormous first generation ethanol plant started up in Hull, UK. The Vivergo Fuels plant cost $448 million to build and will produce 110 million gal per year of ethanol. The feedstock? Wheat, which is grown in the UK for animal feed. The project is a joint venture between deep pocketed partners AB Sugar, BP, and DuPont Industrial Biosciences. Thanks to Ethanol Producer Magazine for the details.

 

Khosla, KiOR Double Down in Mississippi

When the second quarter ended, drop-in cellulosic biofuels maker KiOR was in the process of ramping up production at its first large-scale (eventually 13 million gal per year) plant in Columbus, Miss. The company told investors that it hoped to double the capacity at the Columbus location, at an estimated cost of $225 million.

The company had cash reserves of just under $12 million. But, it had one asset that is incredibly valuable – the backing of venture capitalist Vinod Khosla. Khosla has agreed to fork over $50 million – half of it likely to come from his own personal funds – to seed an investment strategy that may bring in other deep pocketed parties such as an industrial partner or traditional lender.

KiOR makes gasoline and diesel (not ethanol) from cellulosic feedstocks (wood) via fermentation. Khosla was there at the company’s beginning – he helped midwife it into a startup in 2007 and invested in it before – and now after – its IPO in June 2011. The company went public at $15 a share in its pre-production, pre-revenue era (it is now trading around $2.50).

With the Columbus plant, KiOR is in the very first crop of producers of cellulosic biofuels. Investors love that the company’s output is not subject to blend walls the way ethanol production is. But getting steady-state, high levels of output from a first-of-its-kind facility is pretty much unheard of in the second-gen biofuels industry.

And so KiOR is hoping it will produce 1 million gal this year, as it does the start-stop-fix-start thing. That’s why it is interesting that rather than hold out to generate revenue from Columbus I, KiOR plans to use what has been learned already to literally double down on its bet. Interestingly, part of the motivation to build the Columbus II plant is the availability of cheap railroad ties at that location.

In the press release Khosla (who owns a majority stake) stands by his company:

“While KiOR has faced normal start-up issues at the Columbus I facility, I believe that the Columbus I facility has proven that KiOR’s technology can meet and over time exceed the technology performance metrics of approximately 80 gallons per bone dry ton I expected for 2015, driving toward the ultimate goal of producing 92 gallons of hydrocarbon fuels (or over 150 gallons of ethanol equivalent) per bone dry ton of biomass, particularly given the Company’s continued progress in research and development. I believe that KiOR’s proprietary technology platform is substantially better, and can produce hydrocarbon fuels at lower cost, than any other currently visible biofuels fermentation technology, cellulosic or otherwise, that I am aware of.  I expect that cash costs per gallon (excluding depreciation) on an energy content basis at the two Columbus facilities should be lower than today’s corn based ethanol. I also believe that KiOR’s cellulosic fuels, which have a higher per gallon energy content than ethanol and can integrate seamlessly into the existing hydrocarbon fuels infrastructure, will provide a biofuel alternative without blendwall issues that is more attractive than ethanol, considering both production costs and logistical efficiencies.”

That’s rather a lot of very specific declarations by the normally Zen-like master of Cleantech VC. But others also sound pretty darned enthused about the company. Stock analysts Pavel Molchanov at Raymond James and Edward Westlake of Credit Suisse both rate the stock as outperform though they acknowledge that investors are jittery.

Once Columbus I and then Columbus II are up and running, both analysts seem very comfortable with the company’s production cost structure. In the meanwhile, Molchanov says investors’ worries should be quieted by Khosla’s confidence.

“By pledging an additional $50 million – an anchor as KiOR finalizes its long-term financing package – Khosla guaranteed KiOR’s financial security for at least six more months, which should set jittery investors’ minds at ease. Khosla’s status as one of the nation’s wealthiest VC investors means that his (yet again reaffirmed) backing for KiOR is analogous to Elon Musk’s support for Tesla and SolarCity, which in the past, went through their own periods of facing a skeptical market.”

You can read more about Khosla’s long-term investing strategy in biofuels on the Wall Street Journal’s Venture Capital Dispatch blog. In addition, Jim Lane at Biofuels Digest writes about how difficult it is for outsiders – and even insiders – to understand the true status of a ramp-up like KiOR’s.

 

 

Cool Planet Wraps Up $60 Million Funding Round

Biomass to fuels firm Cool Planet has raised $60 million from venture backers in its fourth round of funding. Until now, two things had made Cool Planet unique in the biomass space – it attracted investment from Google Ventures, and its business model calls for small-scale, modular biorefineries.

Since venture backing for cellulosic fuels start-ups has been negligible lately, Cool Planet’s $60 million fund raise gives it a third unusual quality.

In some ways, Cool Planet is a bit like Khosla-backed KiOR – it relies on specialty catalysts to transform biomass (i.e. wood chips, agriculture waste) into drop-in, gasoline-like biofuels rather than ethanol like in most cellulosic fuel plants.

But Cool Planet sequesters the untransformed bits of biomass into what it calls biochar, which can be used as a soil enhancement in agriculture. Cool Planet did not invent the idea of biochar (which is sort of like charcoal), nor did it invent the idea of using it to boost soil productivity (through water and nutrient retention). But the carbon sequestration that biochar represents allows the company to advertise its fuel as carbon negative.

It’s not yet clear if farmers would adopt Cool Planet’s output, however. In fact, the company’s website says it is actively seeking partnerships to get this particular ball rolling. From the outside it is not clear to what degree profitability hinges on the sale of biochar.

Having a modular biorefinery sounds like an attractive concept, considering the module could be placed where biomass exists in significant quantities but would not be profitable to ship to a distant, huge biorefinery. Still, these facilities are not tiny; each “station” would produce 10 million gal per year of biofuel. And Cleantech Chemistry has not yet determined how the company plans to get the fuel output from these distributed outposts transported to a point of sale.

Cool Planet’s fund raising will be used in part to finalize engineering design for its first commercial facility as well as capital for construction in the Port of Alexandria, La. The company says it will be in operation before the end of 2014.

In addition to Google, Cool Planet has backing from North Bridge Venture Partners, Shea Ventures, BP, Energy Technology Ventures, and Excelon.

Harnessing Entropy

In Solar, a novel by acclaimed author Ian McEwan, the protagonist, a physicist named Michael Beard, has been tasked to evaluate submissions from the public sent to a UK panel looking for new ideas for clean energy. He divides them into piles: those that violate the first law of thermodynamics, those that violate the second law, and those that violate both. This cleantech reporter could relate.

That’s why ideas that start with the laws of thermodynamics – rather than those that have to account for them later – are so attractive. Take entropy, for example. In our daily life we struggle against entropy – the iPod headphone wires that get totally knotted up in my handbag, the fact that the neatest person you know still has a junk drawer, and so on.

This week’s issue of C&EN explores research that tries to harness the universe’s arrow-like movement to disorder. When CO2 laden emissions from power plants are released into the atmosphere, the CO2 mixes into the ambient air mass. As Naomi Lubick explains, an electrochemical cell could harvest the energy that is released when these two gases mix. Researcher Bert Hamelers of the Dutch water treatment tech center Wetsus, has developed a lab scale device to do just that.

But Lubick points out that to implement such a solution would require overcoming at least two hurdles – one, the sulfur dioxide and nitrogen oxides may foul the system’s membranes. And two, it is no easy task to dissolve huge amounts of CO2 in liquid.

Dissolving gas in liquid requires toil and trouble. Credit: Wikimedia Commons

Dissolving gas in liquid requires toil and trouble. Credit: Wikimedia Commons

In fact, dissolving the gas uses quite a bit of energy. Which reminds me of another literary reference: the witches of Shakespeare’s MacBeth chant “Double, double, toil and trouble; Fire burn and cauldron bubble” – indeed, there is some toil and trouble involved.

I know that many other researchers and technology companies are working on these two problems. For example, there are programs working on carbon capture and storage that are using liquids, catalysts and membranes to grab components of power plant emission gases. And firms such as Calysta Energy and Lanzatech have plans to use microbes to make useful products out of gases such as methane and flue gas. For that, they need to dissolve the gas in water. It is not a trivial problem.

 

Learning to Like Natural Gas

This week’s cover story – Seeking Biomass Feedstocks That Can Compete – discusses the competition that natural gas might bring to the young renewable fuels and chemicals industry. [You can also check out the YouTube video about Energy Cane]

The story discusses one positive that the rise of natural gas brings to biobased chemical makers – at least those that produce C4 chemicals (i.e. butanediol, butadiene). As the chemical industry swaps petroleum feedstocks for natural gas, their processes will generate a much smaller ratio of C4 chemicals. Firms that rely on those intermediates will seek other sources of C4s.

gas well

Green companies are looking at natural gas. Credit: Chesapeake Energy

But there are a few other ways that the natural gas story intersects with the renewable industries – some obvious, and some not so obvious. One obvious way – cheaper energy from natural gas may help decrease operating costs at all chemical producers, including ones that use biomass feedstocks.

Less obvious – there is a group of renewable companies that use syngas as a feedstock. You know what makes an excellent syngas? Why, that’d be natural gas. Sure, you could gasify plant matter, old tires, construction debris, municipal waste (anything carbon based). Any of those feedstocks will make a flow of carbon monoxide and hydrogen. With chemical or biological catalysts, that syngas can be made into chemicals and fuels.

At least two firms that started out with plans to make syngas from biomass or waste sources now say they will ramp up on natural gas – Coskata, and Primus Green Energy. Coskata’s end product is ethanol, while Primus is targeting drop-in hydrocarbons. Presumably, with a working gasifier and catalysts, they could switch feedstocks whenever the cost basis dictates.

Newlight Technologies wants to make polymers from waste gases like methane from water treatment plants. But methane from under the ground would work well, too. The company says it can also make polymers from CO2 (with a helping hand from a hydrogen generator). Which brings us to…

BASF, which is not really a renewable company, but has got some irons in the fire. The chemical giant has a research project going to rip the hydrogen off of natural gas, and mix that with waste CO2 to make a custom-blended syngas. The firm says getting hydrogen this way is cheaper than other ways (tearing up water molecules, etc). Waste CO2 is something many industries – especially in Europe – would like to do something with. LanzaTech is also in the waste CO2 business. Not sure what its natural gas plans are.

Lastly, two stalwarts of the biobased chemicals industry, Genomatica and OPX Bio are getting a handle on natural gas. Genomatica is working with Waste Management to make C4s from syngas (derived from municipal waste). The syngas project came up in my interview with Genomatica’s CEO Christophe Schilling about natural gas.

More directly, OPX Bio, which is working to make acrylic acid from sugar,  has a lab-scale project for its second product – fatty acids. The company says its process can use syngas made from all the usual suspects including natural gas. There is already a significant market for chemicals based on fatty acids; they can also be converted into nice things like jet fuel.

Natural gas is not a renewable resource, so one might wonder why these green tech firms would bother using it at all. I can think of three reasons: one – as a first feedstock to prove one’s catalyst technology, two, as an alternate feedstock to balance price and availability of biomass or waste, and three, as a way to fix the mass-balance of hydrogens and carbons in your syngas. If adding 10% of syngas increases yields by 20%, that might be tempting.

There is one way that natural gas as a feedstock might be considered “green.” This comes via Alan Shaw of Calysta. The company uses methane munching bacteria to capture natural gas, then enzymes in the cells can make desired products. Shaw suggests a good use of the technology would be to install small-scale units where there is so-called “stranded” natural gas. That would include oil wells that flare the natural gas that comes up with the crude oil in places like North Dakota.

 

EPA’s Magic Number for Cellulosic Biofuels

It’s going to be 6 million gallons. That is how much cellulosic biofuel EPA’s research (crystal ball?) shows will be produced in the U.S. this year, and what fuel blenders, who live by the Renewable Fuels Standard, will have to put in their product.

EPA’s final rule on this question was published today. And the text includes a remarkable figure: “From 2007 through the second quarter of 2012 over $3.4 billion was invested in advanced biofuel production companies by venture capitalists alone.”

Egads. Anyway, for at least one more year, cellulosic biofuel will be the black-footed ferret of fuel types, which is to say, exceedingly rare. By comparison there will be over 16 billion gal of regular biofuel (like the stuff made from corn and soybeans) this year.

The 6 million figure comes from output from two sources – the largest is Kior’s Columbus, MS plant, which is projected to make between 5 or 6 million gal of gasoline and diesel from woody biomass using a special kind of catalytic cracking technology. The remainder will be produced by Ineos Bio (see the below post).

I note that the Kior facility’s output is not ethanol and so nicely side-steps the issue of the “blend-wall”, which affects ethanol producers. For 2014, however, the fact that most advanced biofuels are ethanol will cause the EPA some RFS problems. EPA is now saying that there will be changes:

EPA does not currently foresee a scenario in which the market could consume enough ethanol sold in blends greater than E10, and/or produce sufficient volumes of non-ethanol biofuels to meet the volumes of total renewable fuel and advanced biofuel as required by statute for 2014. Therefore, EPA anticipates that in the 2014 proposed rule we will propose adjustments to the 2014 volume requirements, including the advanced biofuel and total renewable fuel categories.

We expect that in preparing the 2014 proposed rule, EPA will estimate the available supply of cellulosic biofuel and advanced biofuel volumes, assess the ethanol blendwall and current infrastructure and market-based limitations to the consumption of ethanol in gasoline-ethanol blends above E10, and then propose to establish volume requirements that are reasonably attainable in light of these considerations and others as appropriate